New York (MainStreet) - Net neutrality got a major boost on Monday when President Barack Obama threw his support behind the movement, saying in a statement that Internet service providers should be treated like a public utility and banned from giving preferential treatment to different websites. This is the President’s first official stance on the issue and comes as the Federal Communications Commission is drawing up a new approach to so-called “fast lanes.”

From the President’s statement:

"For almost a century, our law has recognized that companies who connect you to the world have special obligations not to exploit the monopoly they enjoy over access in and out of your home or business. That is why a phone call from a customer of one phone company can reliably reach a customer of a different one, and why you will not be penalized solely for calling someone who is using another provider. It is common sense that the same philosophy should guide any service that is based on the transmission of information – whether a phone call, or a packet of data."


WATCH: More personal finance videos on TheStreet TV | More videos from Ross Kenneth Urken

Net neutrality is the idea that all websites and content providers should have equal access to bandwidth. It would ban service providers from slowing down, selling access to or blocking websites. Advocates for net neutrality point out that the Internet has always worked this way, and they are asking for the FCC only to protect the status quo.

Broadband providers responded angrily to President Obama’s statement, arguing that the government should not regulate the infrastructure they’ve spent time and money building. In a statement to the press, Comcast said that net neutrality would threaten “investment and innovation,” while AT&T senior vice president Jim Cicconi threatened litigation if any neutrality rule moved forward.

It would not be the industry’s first courtroom battle on this issue.

In 2010, the FCC passed a rule codifying net neutrality which the broadband industry challenged in a series of lawsuits that ended in a victory at the D.C. Circuit Court of Appeals. The court did not hold that the FCC lacks authority to regulate broadband networks. Instead it wrote that for the agency to regulate traffic across broadband networks, it would have to classify them as public utilities. Since the FCC has not to date classified broadband networks as public utilities, it can’t impose neutrality rules.

Although the industry argues that these are outlandish scenarios, data tracked by Netflix and the Washington Post indicate that it has already happened when, within weeks of the court’s decision, Comcast throttled access to the streaming movie service in order to extract network access fees.

Many broadband providers argue that competition will prevent abuses like this; however, as it turns out. there is very little actual choice in the broadband marketplace. Although there are many service providers nationwide, according to the FCC "three-quarters of American homes have no competitive choice for the essential infrastructure for 21st century economics and democracy."

In his statement, the President called for the FCC to reclassify Internet service providers as public utilities and to establish bright line rules including:

  • No blocking of any legal website or service,
  • No “throttling,” intentionally slowing access to a website or service,
  • No Internet fast lanes for companies willing to pay extra, and
  • Increased transparency in case any future rules are necessary to ensure neutral access to the Internet.

In addition to industry opposition, Republicans have denounced President Obama’s statement as an example of government overregulation that will slow down investment in broadband infrastructure.

Although the FCC is under no deadline to produce a new rule on this issue, Chairman Tom Wheeler has indicated that he would like to have one proposed by the end of the year. Net neutrality has become a major issue for the commission, as more than 3.6 million people have submitted comments on the subject, most of which support strong enforcement of the traditional rules.

--Written for MainStreet by Eric Reed, a freelance journalist who writes frequently on the subjects of career and travel. You can read more of his work at his website www.wanderinglawyer.com